When you are under severe debt with no way of paying back the creditors, you may start considering bankruptcy. Bankruptcy is often kept as a last resort because of obvious reasons. It can significantly impact your life and stays on your credit report for up to 10 years. That is why it is important to consider other options as well.
There can be various situations where you consider bankruptcy as your only option. However, many people are unaware, but there are various alternatives to bankruptcy. In some situations, these alternatives can be your remedy to escape from filing a bankruptcy. Speak to a Chapter 11 business bankruptcy attorney to understand all the possible options to bankruptcy.
Alternatives to bankruptcy
Stop harassment from creditors.
If your main concern is harassment from creditors, then bankruptcy is not the solution you are looking for. You need to do something about the annoying creditors, not your debt. If you are able to pay debt with your income but are feeling too irritated by the constant calls and texts from creditors, you can file a legal complaint.
There are certain laws protecting the rights of debtors. While the creditors are allowed to do certain things, they are not prohibited from crossing boundaries too. Hiring an attorney and getting to know your rights can help you significantly.
If you are considering Chapter 7 bankruptcy, you should know that the court will first sell your assets to pay off the debts. Therefore, instead of filing for bankruptcy, you can sell the assets yourself. This is a good option when your income is not enough to make the monthly installments.
If you have valuable assets, you can reduce your debt without filing for bankruptcy at all. If you have a business, make a list of the assets that are important for your business so you can keep them aside. Use the rest of the assets to pay off your debt.
Negotiate with your creditors.
Negotiating with your creditor can help you reduce the debt, lower the interest rate or buy some more time to pay off your debt. If you have a good relationship with your creditor, it may be possible that they listen to you. Remember to keep a calm tone when negotiating and keep things reasonable.
Borrow money from friends and family.
If you can borrow money from your close friends and family members without having to pay them back right away, you should not consider bankruptcy. You should take the loan from people who won’t ruin your relationship with you over money. Put it in writing and schedule a payback time. However, this should be your last option before bankruptcy.
Contacting an attorney.
Bankruptcy has its own pros and cons. While there are many positive effects when you file for bankruptcy, it can significantly impact your image. Therefore, it is essential to explore your options besides bankruptcy. When you meet a bankruptcy attorney, they will conduct a thorough investigation.
During your first meeting, make sure you have all the documents with you in hand to help the attorney understand your debts. It is also vital to be transparent with your attorney so that they can asses you further. While there are many attorney’s can see their personal benefits when you file for bankruptcy, it is crucial to ensure that you find a reliable attorney who works in your favor instead of them.
After studying your case, the attorney will tell you if filing for bankruptcy is the only option. If it is, they will guide you on the procedure to make it hassle-free and quick without creating a dramatic effect in your life.